Forex Market: EUR/GBP daily forecast

During yesterday’s trading session EUR/GBP traded within the range of 0.8086-0.8145 and closed at 0.8097.

At 6:14 GMT today EUR/GBP was losing 0.04% for the day to trade at 0.8095. The pair touched a daily low at 0.8091 at 6:01 GMT.

Fundamental view

Euro zone

The advance (preliminary) manufacturing Purchasing Managers’ Index (PMI) in the Euro zone probably slowed down to 53.2 in May, from a final reading of 53.4 in the previous month, according to the median forecast by experts.

The index is based on a monthly survey, which includes carefully selected companies that are representative of the state of the private sector in the economy and track the changes in production, new orders, market share, employment and prices in the manufacturing sector. The PMI is the first economic indicator for each month, providing information on the changing economic conditions, significantly earlier than the official state statistics. It is presented as a scale from 1 to 100. Readings above 50 are connected with a positive outlook for economic growth. Conversely, values ​​below 50 indicate a less optimistic forecast. This is a preliminary value of the indicator.

The research group Markit Economics will release the official figures at 8:00 GMT. A higher-than-expected reading would certainly boost demand for the 18-nation common currency.

In addition, the advance (preliminary) reading of Germany’s Services PMI probably slowed down to 54.5 in May, according to the median analysts estimate. In April, the index came in at 54.7. The official reading is to be released at 7:30 GMT.

Moreover, the advance (preliminary) reading of Euro zone’s Services PMI probably slowed down to 53.0 this month, after the index came in with a final reading of 53.1 in April. In case market expectations are exceeded, this will boost demand for the single currency. Markit Economics will report the official value at 8:00 GMT.

United Kingdom

The preliminary (revised) reading of the British GDP probably matched the advance reading of 3.1% in the first quarter compared to a year ago. The advance reading was estimated on April 29.

The Gross Domestic Product is an integral part of the UK public account and measures the total economic activity of the country. GDP is still referred to as one of the main “common indicators” for economic activity and presents economic growth in the last quarter. This is the first calculation of the indicator based on production data and is published three-and-a-half weeks after the end of the quarter. This is a preliminary value of the indicator and is presented as a percentage change compared to the corresponding quarter a year earlier.

The Office for National Statistics is scheduled to release an official report at 08:30 GMT. In case, the British GDP grew at a faster-than-expected pace, sterling’s demand will be heightened.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/GBP manages to breach the first resistance level at 0.8133, it will probably continue up to test 0.8168. In case the second key resistance is broken, the pair will probably attempt to advance to 0.8192.

If EUR/GBP manages to breach the first key support at 0.8084, it will probably continue to slide and test 0.8050. With this second key support broken, the movement to the downside will probably continue to 0.8015.